The present invention relates to a method of forming iron oxide nanoparticles comprising the steps of (a) suspending iron oxide/hydroxide and oleic acid or a derivative thereof in a primary organic solvent； (b) increasing the temperature of the suspension by a defined rate up to a maximum of 340° C. to 500° C.； (c) aging the suspension at the maximum temperature of step (b) for about 0.5 to 6 h； (d) cooling the suspension； (e) adding a secondary organic solvent； (f) precipitating nanoparticles by adding a non-solvent and removing excess solvent； (g) dispersing said nanoparticles in said secondary organic solvent； (h) mixing the dispersion of step (g) with a solution of a polymer； and (i) optionally removing said secondary organic solvent. The present invention further relates to an iron oxide nanoparticle obtainable by the method, the additional modification, encapsulation and decoration of such nanoparticles, as well as the use of the nanoparticles as tracers for Magnetic Particle Imaging (MPI), Magnetic Particle Spectroscopy (MPS).
